Finance Act 2015

Type Act

Publication 2015-12-21

State In force

Source Irish Statute Book

articles 90

(B) where the expenditure is incurred on refurbishment of the building or structure, 7 years after the building or structure was first used subsequent to the incurring of that expenditure,

and

(II) where the expenditure is not specified capital expenditure—

(A) 25 years after the building or structure was first used, or

(B) where the expenditure is incurred on refurbishment of the building or structure, 25 years after the building or structure was first used subsequent to the incurring of that expenditure.”,

and

(d) in Schedule 25B—

(i) by substituting the following for clause (VIII) of paragraph (a)(i) of the matter set out opposite reference number 13:

“(VIII) section 268(1)(n) (inserted by the Finance Act 2013) to the extent that the writing-down allowances are referable to specified capital expenditure (within the meaning of section 268),”,

and

(ii) by substituting the following for clause (VIII) of paragraph (a)(i) of the matter set out opposite reference number 15:

“(VIII) section 268(1)(n) (inserted by the Finance Act 2013) to the extent that the balancing allowances are referable to specified capital expenditure (within the meaning of section 268),”.

(2) Section 31 of the Finance Act 2013 is amended by substituting the following for subsection (2):

“(2) This section comes into operation on 13 October 2015.”.

(3) Section 33 of the Finance Act 2014 is amended by substituting the following for subsection (2):

“(2) This section comes into operation on 13 October 2015.”.

28. Amendment of section 1035A of Principal Act (relieving provision to section 1035)

28. Section 1035A of the Principal Act is amended in subsection (1) —

(a) by inserting the following definitions:

“ ‘AIF’ has the same meaning as in section 747G;

‘AIFM’ has the same meaning as in section 747G;

‘branch or agency’ has the same meaning as in section 4;

‘EEA state’ has the same meaning as in section 747B;

‘relevant AIFM Directives’ has the same meaning as in section 747G;”,

and

(b) in the definition of “authorised agent”—

(i) by substituting “revoked,” for “revoked, or” in paragraph (b), and

(ii) by inserting the following after paragraph (c):

“or

(d) an AIFM authorised—

(i) under any laws of the State which implement the relevant AIFM Directives, or

(ii) under the laws of an EEA state and which manages one, or more than one, AIF through a branch or agency in the State,”.

29. Amendment of Part 36 of Principal Act (miscellaneous special provisions)

29. Part 36 of the Principal Act is amended by inserting the following after section 845B:

“Treatment of Additional Tier 1 instruments

845C. (1) In this section—

‘Additional Tier 1 instrument’ means an instrument which qualifies, or has qualified, as an Additional Tier 1 instrument under Article 52 of the Capital Requirements Regulation;

‘Capital Requirements Regulation’ means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013[^21] on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012[^22];

‘coupon’ means a distribution, within the meaning of Article 4 of the Capital Requirements Regulation, in respect of an Additional Tier 1 instrument.

(2) For the purposes of the Tax Acts, an Additional Tier 1 instrument shall be regarded as a debt instrument.

(3) For the purposes of the Tax Acts, a coupon in respect of an Additional Tier 1 instrument—

(a) shall be regarded as interest, and

(b) shall not be regarded as a distribution or a charge on income.

(4) Section 64 shall apply, with any necessary modifications, to an Additional Tier 1 instrument as it applies to a quoted Eurobond.

(5) This section shall not apply to an Additional Tier 1 instrument that forms part of any arrangement or scheme the main purpose, or one of the main purposes, of which is avoidance of liability to tax.”.

Chapter 5 Corporation Tax

30. Amendment of section 486C of Principal Act (relief from tax for certain start-up companies)

30. Section 486C of the Principal Act is amended in subsection (2)(a) by substituting “31 December 2018” for “31 December 2015”.

31. Amendment of section 765 of Principal Act (allowances for capital expenditure on scientific research)

31. Section 765 of the Principal Act is amended—

(a) in subsection (1), by substituting the following paragraph for paragraph (d):

“(d) so applies—

(i) in the case where the expenditure was incurred while carrying on the trade, within 24 months after the end of the chargeable period in which it was incurred, or

(ii) in the case where the expenditure was incurred before the setting up and commencement of the trade, within 24 months after the end of the chargeable period in which the trade was set up and commenced,

and any asset representing such capital expenditure on scientific research is in use for the purposes of scientific research at the end of the chargeable period,”,

and

(b) in subsection (4) by inserting “or any subsequent” after “284 for that”.

32. Amendment of Part 29 of Principal Act (patents, scientific and certain other research, know-how and certain training)

32. (1) The Principal Act is amended—

(a) in Part 29 by inserting the following Chapter after Chapter 4:

“Chapter 5

Taxation of Companies Engaged in Knowledge Development

Interpretation and general

769G. (1) In this Chapter—

‘accounting period’ in relation to a company, means an accounting period determined in accordance with section 27;

‘acquisition costs’, in relation to expenditure incurred on a qualifying asset, means the expenditure incurred on the acquisition of intellectual property, or rights over intellectual property, where that intellectual property is reflected in the value of the qualifying asset, but where expenditure incurred on acquiring the intellectual property is incurred otherwise than by means of a bargain made at arm’s length, that acquisition shall, for the purposes of this Chapter, be deemed to be for a consideration equal to the open market value of the intellectual property;

‘group’ means a company and all of its 51 per cent subsidiaries;

‘group outsourcing costs’, in relation to a qualifying asset, means any amount incurred in carrying on research and development activities which results in a qualifying asset, where that amount is not qualifying expenditure but would be qualifying expenditure on a qualifying asset—

(a) if the research and development activities were carried on in a Member State, or

(b) but for subsection (2)(b)(iii) or (vi),

and shall not include any amount of qualifying expenditure or acquisition costs;

‘intellectual property’, other than for the purposes of the definition of ‘acquisition costs’ or ‘marketing-related intellectual property’ in this subsection and without prejudice to section 769R, means—

(a) a computer program, within the meaning of the Copyright and Related Rights Act 2000, but, where a computer program is a derivative work or adaptation, the portion of the computer program that represents the derivative work or the adaptation of the original work and the original work shall be treated as two separate computer programs, or

(b) an invention protected by—

(i) a qualifying patent,

(ii) any supplementary protection certificate issued under Council Regulation (EC) No. 469/2009 of 6 May 2009[^23] concerning protection for medicinal products or any such certificate extended in accordance with Article 36 of Regulation (EC) 1901/2006,

(iii) any supplementary protection certificate issued under Regulation (EC) No. 1610/96 of the European Parliament and of the Council of 23 July 1996[^24] concerning protection for plant protection products, or

(iv) any plant breeders’ rights within the meaning of section 4 of the Plant Varieties (Proprietary Rights) Act 1980;

‘interest’, unless the context otherwise requires, includes any interest payable on a debt instrument, any discount on the issue of such an instrument, and any premiums paid or payable on redemption of such an instrument, or on the capital represented by such an instrument;

‘marketing-related intellectual property’ includes trademarks, brands, image rights and other intellectual property used to market goods or services;

‘Member State’ has the same meaning as ‘relevant Member State’ has in section 766;

‘overall expenditure on the qualifying asset’, means—

(a) the qualifying expenditure incurred in relation to that qualifying asset, and

(b) the aggregate of the acquisition costs and the group outsourcing costs relating to that qualifying asset, incurred in any accounting period;

‘overall income from the qualifying asset’ means the following amounts arising in respect of an accounting period—

(a) any royalty or other sums in respect of the use of that qualifying asset,

(b) where the sales price of a product or service, excluding both duty due or payable and any amount of value-added tax charged in the sales price, includes an amount which is attributable to a qualifying asset, such portion of the income from those sales as, on a just and reasonable basis, is attributable to the value of the qualifying asset,

(d) any amount of insurance, damages or compensation in relation to the qualifying asset,

where that amount is taken into account in computing, for the purposes of assessment to corporation tax, the profits of a trade, and overall income from qualifying assets shall be construed accordingly;

‘qualifying asset’ means an asset which is intellectual property, other than marketing-related intellectual property, and which is the result of research and development activities;

‘qualifying expenditure on the qualifying asset’ has the meaning assigned to it in subsection (2) and qualifying expenditure in relation to all qualifying assets shall be construed accordingly;

‘qualifying patent’ means—

(a) a patent granted following substantive examination for novelty and inventive step, or

(b) a patent, other than a short term patent within the meaning of section 63 of the Patents Act 1992, or an equivalent provision in another jurisdiction, where—

(i) the Patents Office in the State, or equivalent Office elsewhere, has caused a search to be undertaken in relation to the invention and a search report (within the meaning of section 29 of the Patents Act 1992) prepared, and

(ii) either—

(I) the patent was granted prior to 1 January 2016, or

(II) the patent was granted on or after 1 January 2016 and before 1 January 2017 and a patent agent, within the meaning of section 106 of the Patents Act 1992, certifies that in his or her opinion such a patent meets the patentability criteria, in that the invention is susceptible of industrial application, new and involves an inventive step,

but this paragraph is subject to section 769I(6)(a)(i)(VII);

‘relevant company’ means a company which carries on a specified trade and is within the charge to tax in the State, and where two or more companies carry on that specified trade in partnership then each company that is within the charge to tax in the State shall be a relevant company;

‘research and development activities’ has the meaning assigned to it in section 766;

‘specified trade’ has the meaning assigned to it in subsection (3);

‘up-lift expenditure’, in relation to a qualifying asset, is the lower of—

(a) 30 per cent of the amount of the qualifying expenditure on the qualifying asset, or

(b) the aggregate of acquisition costs and group outsourcing costs.

(2) (a) Subject to paragraph (b), for the purposes of this Chapter, qualifying expenditure in relation to the qualifying asset, in respect of a company, means expenditure incurred by a relevant company, in any accounting period, wholly and exclusively in the carrying on by it of research and development activities in a Member State where such activities lead to the development, improvement or creation of the qualifying asset, being an amount—

(i) which is allowable as a deduction in computing the profits or gains from a trade (otherwise than by virtue of section 307), or would be so allowable but for the fact that for accounting purposes it is brought into account in determining the value of an asset,

(ii) expended on machinery or plant (other than specified intangible assets within the meaning of section 291A treated as machinery or plant by virtue of subsection (2) of that section where the specified intangible asset was acquired directly or indirectly from a member of the group) which qualifies for any allowance under Part 9,

and for the purposes of this section, where a company engages a person who is not a member of the group, to carry on research and development activities on behalf of that company, then any sum payable to that person in respect of those activities shall be treated as if it were expenditure incurred by the company in the carrying on by it of research and development activities in a Member State.

(b) Qualifying expenditure on the qualifying asset shall not include—

(i) any amount of acquisition costs in relation to the qualifying asset,

(ii) any amount of interest paid or payable,

(iii) an amount paid or payable directly or indirectly to a member of the group to carry on research and development activities, whether under a cost sharing arrangement or otherwise,

(iv) expenditure incurred under a cost sharing arrangement with another company to the extent that such expenditure exceeds an amount that would be determined by means of a bargain made at arm’s length,

(v) any additional amount, agreed between members of the group, on an expense paid or payable indirectly through a group member to a person who is not a member of the group to carry on research and development activities, where that additional amount is to be retained by the group member, or

(vi) any amount incurred if that amount—

(I) may be taken into account as an expense in computing income of the company,

(II) is expenditure in respect of which an allowance for capital expenditure may be made to the company, or

(III) may otherwise be allowed or relieved in relation to the company,

for the purposes of tax in a territory other than the State.

(3) (a) Subject to paragraph (b), for the purposes of this Chapter, specified trade means a trade or part of a trade, other than an excepted trade within the meaning of section 21A, consisting of or including one or more of the following categories of activities—

(i) the managing, developing, maintaining, protecting, enhancing or exploiting of intellectual property,

(ii) the researching, planning, processing, experimenting, testing, devising, developing or other similar activity leading to an invention or creation of intellectual property, or

(iii) the sale of goods or the supply of services that derive part of their value from activities described in subparagraphs (i) and (ii), where those activities were carried on by the relevant company.

(b) In the case of a trade consisting partly of the carrying on of such activities, as described in paragraph (a), and partly of the carrying on of other activities, that part of the trade consisting solely of the carrying on of activities described in paragraph (a) shall be a specified trade.

(4) Where a relevant company incurs expenditure for the purposes of a specified trade before the time that trade has been set up and commenced, then for the purposes of this Chapter other than section 769O, that expenditure shall be deemed to have been incurred in the first accounting period of that company.

Families of products and assets

769H. (1) This section has effect where—

(a) a relevant company has a number of qualifying assets, and

(b) owing to the interlinked nature of the qualifying assets and their use in the specified trade, it would be reasonable to conclude that it would not be possible for the relevant company to identify the overall expenditure on each qualifying asset or the overall income from each qualifying asset.

(2) In subsection (3) ‘family of assets’ means the smallest grouping of assets referred to in subsection (1) for which the expenditure and income referred to in that subsection can reasonably be identified.

(3) Where—

(a) this section has effect, and

(b) the relevant company opts for this Chapter to so apply,

then this Chapter shall apply, in relation to the relevant company, as if references to qualifying assets were references to a family of assets.

Corporation tax referable to a specified trade

769I.(1) For the purposes of this section qualifying profits, in relation to a qualifying asset, shall be the amount determined by the formula—

where—

QE is the qualifying expenditure on the qualifying asset,

UE is the uplift expenditure,

OE is the overall expenditure on the qualifying asset, and

QA is the profit of the specified trade relevant to the qualifying asset before taking account of any allowance available under subsection (5).

(2) (a) Where qualifying profits in respect of a qualifying asset arise in the course of a specified trade, then a relevant company may make a claim in respect of that qualifying asset under this section, in the return required to be filed pursuant to section 959I.

(b) Subject to section 769P, any claim under this section shall be made once in respect of each qualifying asset and shall be made within 24 months from the end of the accounting period to which the claim relates.

(c) Where under this section a claim is made to include the overall income from the qualifying asset in the income of a specified trade in any accounting period, then all amounts of income and expenditure related to that qualifying asset shall be taken to continue to relate to that specified trade until such time as the qualifying asset is disposed of or ceases to be used.

(3) Where during an accounting period a relevant company, which has made a claim under this section, carries on a specified trade, those activities shall be treated for the purposes of this Chapter, Chapter 2 of Part 8, Chapter 3 of Part 12 and Part 41A, as a separate trade distinct from any other trade carried on by the company.

(4) (a) Subject to paragraph (b), in order to determine the profits or gains of the specified trade to be charged to tax under Case I of Schedule D—

(i) the income of the trade shall be the overall income from qualifying assets in respect of which a claim has been made under this section, and

(ii) any necessary apportionment shall be made so that expenses laid out or expended in earning the income referred to in subparagraph (i) shall be attributed to the specified trade on a just and reasonable basis and the amount of the expenses shall be an amount which would be attributed to a distinct and separate company, engaged in the same activities, if it were independent of, and dealing at arm’s length with the relevant company.

(b) Where a relevant company has carried on a specified trade for one or more previous accounting periods, then the method or methods of apportionment used for the purposes of this section shall be applied consistently between accounting periods, unless there has been a significant change in the conduct of the relevant company’s trade or business.

(5) In computing for the purposes of corporation tax the profits of a relevant company’s specified trade for an accounting period, insofar as the profits are referable to qualifying profits from a qualifying asset in respect of which a claim was made under this section, there shall be made an allowance equal to 50 per cent of the qualifying profits and that allowance shall be treated as a trading expense of the trade in that period.

(6) (a) The Revenue Commissioners may, in relation to a claim by a relevant company that a profit is a qualifying profit—

(i) consult with any person (in this subsection referred to as an ‘expert’) who in their opinion may be of assistance in ascertaining the extent to which:

(I) expenditure is qualifying expenditure on the qualifying asset;

(II) expenditure is overall expenditure on the qualifying asset;

(III) income is overall income from the qualifying asset;

(IV) intellectual property is, or forms part of, a qualifying asset;

(V) any apportionment is done on a just and reasonable basis;

(VI) arm’s length values have been correctly determined; or

(VII) a patent, referred to in paragraph (b) of the definition of ‘qualifying patent’ in section 769G(1), meets the patentability criteria set out in that paragraph,

and

(ii) notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, but subject to paragraph (b), disclose to the expert any detail in the company’s claim under this section which they consider necessary for the purposes of such consultation.

(b) (i) Before disclosing information to any expert under paragraph (a), the officer of the Revenue Commissioners shall give the company a notice in writing of—

(I) the officer’s intention to disclose information to an expert,

(II) the information that the officer intends to disclose,

(III) the identity of the expert whom the officer intends to consult,

and shall allow the company a period of 30 days after the date of the notice to show to the officer’s satisfaction that disclosure of such information to that expert could prejudice the company’s trade or business.

(ii) Where, on the expiry of the period referred to in subparagraph (i), it is not shown to the satisfaction of the officer that disclosure could prejudice the company’s trade or business, the officer may disclose the information on the expiry of a further period of 30 days after giving notice in writing of the officer’s decision to disclose the information.

(iii) A company aggrieved by an officer’s decision made under subparagraph (ii) in respect of it may appeal the decision to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of that decision.

Interaction with sections 766, 766A and 766B

769J. For the purposes of determining the amount of any claim made pursuant to section 766(4B)(a), the excess referred to in that section shall be calculated as if this Chapter did not apply.

Adaptation of provisions relating to relief for relevant trading losses and relevant charges on income

769K. (1) For the purposes of this section relevant trading losses and relevant trading charges relating to a specified trade relevant to a qualifying asset which was the subject of a claim under section 769I(2) shall be the amount of such losses or charges as reduced by—

where—

QE is the qualifying expenditure on the qualifying asset,

UE is the uplift expenditure, and

OE is the overall expenditure on the qualifying asset.

(2) Notwithstanding any other provision of the Tax Acts, where a relevant company makes a claim for relief under—

(a) section 243A, that section shall apply, with any necessary modifications, as if the amount of relevant trading charges on income relating to a specified trade were reduced by 50 per cent,

(b) section 396A or 420A, the section shall apply, with any necessary modifications, as if the amount of a relevant trading loss arising in the course of a specified trade were reduced by 50 per cent, or

(c) section 243B, 396B or 420B, the section shall apply, with any necessary modification, as if the reference in the formula to ‘R’ were a reference to ‘R as reduced by 50 per cent’.

Documentation

769L. (1) (a) A relevant company in relation to all qualifying assets in respect of which a claim was made under section 769I(2) shall have available such records as may reasonably be required for the purposes of determining whether, in relation to such an asset, the qualifying profits has been computed in accordance with this Chapter.

(b) The records shall demonstrate that—

(i) overall income from the qualifying asset,

(ii) qualifying expenditure on the qualifying asset, and

(iii) overall expenditure on the qualifying asset,

have been tracked, and the relevant company shall have available documentation on this tracking which shows how such expenditures and income are linked to the qualifying asset.

(c) If the relevant company has opted under subsection (3) of section 769H for this Chapter to apply in the manner specified in that subsection, then, in relation to any family of assets referred to in that subsection, the relevant company shall also have available records that support the reasonableness of the company having opted as mentioned in this paragraph, including such records as are required to support—

(i) the commonality of scientific, technological or engineering challenges underlying the research and development activities which were undertaken and which resulted in the qualifying assets,

(ii) the consistency of the chosen method of grouping with the organisation of research and development activities carried on by the relevant company,

(iii) the creation of a nexus between expenditures and a family of assets, or

(iv) the choice of a family of assets with which to create that nexus,

as may be relevant in each case.

(d) A relevant company in claiming that a derivative work or an adaptation represents a qualifying asset shall have available records which—

(i) identify the original work and the derivation or adaptation therefrom,

(ii) the costs associated with both the original work and the derivative work or the adaptation, and

(iii) support any method of apportionment of income between the original work and the derivative work or adaptation.

(2) The requirements of this section shall not apply to expenditures incurred prior to 1 January 2016.

(3) The records referred to in subsection (1) shall be prepared on a timely basis and, subject to subsection (4), the obligations contained in subsections (3) and (4) of section 886 to keep and retain records and linking documents apply to all records, documents or other data created or maintained manually or by any electronic means for the purposes of this Chapter.

(4) For the purposes of this section, section 886(4) (a) shall apply as if for subparagraphs (i) and (ii) there were substituted:

‘in respect of each qualifying asset, for a period of 6 years from the end of the accounting period in which a return has been delivered in respect of the last accounting period in which that asset was a qualifying asset and’.

(5) An officer of the Revenue Commissioners may by notice in writing require a relevant company to furnish the officer with such information or particulars as may be necessary for the purposes of giving effect to this Chapter.

(6) (a) The Revenue Commissioners may make regulations for the purposes of this section and those regulations may contain such incidental, supplemental or consequential provisions as appear to the Revenue Commissioners to be necessary or expedient—

(i) to enable persons to fulfil their obligations under this Chapter or under regulations made under this section, or

(ii) to facilitate the operation of the provisions of this Chapter or regulations made under this section in an efficient manner.

(b) Regulations made under this section shall be laid before Dáil Éireann as soon as may be after they are made, and if a resolution annulling those regulations is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulations are laid before it, the regulations shall be annulled accordingly, but without prejudice to the validity of anything previously done under them.

(7) Failure to have available such documentation as is required under this section shall, notwithstanding anything else in this Chapter, result in a company not being a relevant company for the purposes of this Chapter in respect of the accounting period to which the failure relates.

Anti-avoidance

769M. Qualifying expenditure on the qualifying asset and overall income from the qualifying asset shall not include any amount unless that amount is expended or received for bona fide commercial purposes and is not part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax.

Application of Part 35A

769N. Where a relevant company is a company to which Part 35A applies, then section 835D shall apply, with any necessary modifications, to:

(a) determining the market value of the intellectual property, as required by the definition of acquisition costs;

(b) apportioning income, as required in the definition of ‘overall income from the qualifying asset’;

(c) apportionments of research and development activities as required in the definition of ‘qualifying expenditure on the qualifying asset’;

(d) any apportionments required under section 769I; and

(e) any apportionments required under section 769O.

Transitional measures

769O. (1) Subject to subsection (4) for the purposes of determining the qualifying profits in relation to a qualifying asset for accounting periods beginning on or after 1 January 2016 but on or before 31 December 2019—

(a) acquisition costs in relation to a qualifying asset shall include any acquisition costs incurred prior to 1 January 2016,

(b) group outsourcing costs in relation to a qualifying asset shall include any group outsourcing costs incurred prior to 1 January 2016 and where group outsourcing costs incurred prior to 1 January 2016 related to more than one qualifying asset, those costs shall be apportioned on a just and reasonable basis, and

(i) be calculated with reference to qualifying expenditure in relation to all qualifying assets in the 48 month period ending on the last day of the accounting period, and

(ii) be—

(I) calculated in accordance with this Chapter, and

(II) calculated as a portion of the total qualifying expenditure on qualifying assets, where the expenditure is incurred prior to 1 January 2016.

(2) Subject to subsection (4), for the purposes of determining the qualifying profits in relation to a qualifying asset for accounting periods beginning on or after 1 January 2020—

(a) acquisition costs in relation to a qualifying asset shall include any acquisition costs incurred prior to 1 January 2016.

(b) group outsourcing costs in relation to a qualifying asset shall include any group outsourcing costs incurred prior to 1 January 2016 and where such group outsourcing costs incurred prior to 1 January 2016 related to more than one qualifying asset, those costs shall be apportioned on a just and reasonable basis.

(3) A relevant company in relation to all qualifying assets to which this section applies shall have available such records as may reasonably be required for the purposes of determining whether, in relation to such an asset, the qualifying profit has been computed in accordance with this Chapter and section 769L shall apply to these records.

(4) Where, in advance of first making a claim under section 769I, a company has documentation in respect of—

(a) group outsourcing costs in relation to a qualifying asset, or

(b) qualifying expenditure on the qualifying asset,

incurred prior to 1 January 2016 which satisfies the requirements of section 769L(1) then notwithstanding subsections (1) and (2) that company may use amounts calculated with reference to that documentation in applying section 769I.

Time limits

769P. (1) Where a company has submitted an application to a Patents Office which would result in a qualifying asset if the patent or protection sought were granted, then the company may make a claim under section 769I(2) —

(a) in the accounting period in which the application is submitted, and if the application is subsequently refused then the company shall amend each return, within the meaning of section 959A, in which a deduction under section 769I(5) was claimed, and pay any additional tax and interest due accordingly, or

(b) subject to subsection (2), in the accounting period in which the application is granted, and notwithstanding anything to the contrary in section 959AA or section 865, a Revenue officer shall amend an assessment for each accounting period in which overall income from a qualifying asset arose, and any tax to be repaid shall be repaid accordingly and for the purposes of section 865A any such claim shall not be a valid claim on any date before the return, within the meaning of section 959A, for the accounting period in which the application is granted is filed.

(2) Where a company intends to make a claim pursuant to subsection (1) (b), then in respect of each accounting period prior to the accounting period in which the application is granted the company shall make a claim (a ‘protective claim’) for the amount of the allowance that may be claimed upon the application being granted, and any subsequent claim pursuant to subsection (1) (b) shall not exceed the amount of those protective claims.

Application

769Q. This Chapter shall apply to accounting periods which commence on or after 1 January 2016 and before 1 January 2021.”,

(b) in Chapter 5 of Part 29 by inserting the following after section 769Q (inserted by paragraph (a)):

“Companies with income arising from intellectual property of less than €7,500,000

769R. (1) In this section—

‘average overall income from intellectual property’ in respect of an accounting period means the lower of —

(a) the overall income from intellectual property for an accounting period, or

(b) an amount calculated as:

A x N

where —

A is the average monthly overall income from intellectual property for the last 60 months, and

N is the number of months in the accounting period;

‘company threshold amount’ means €7,500,000 and where an accounting period is shorter than 12 months, this amount shall be reduced proportionately;

‘intellectual property for small companies’ means inventions that are certified by the Controller of Patents, Designs and Trade Marks as being novel, non-obvious and useful;

‘overall income from intellectual property’ means the following amounts arising to the company in respect of an accounting period—

(a) any royalty or other sums in respect of the use of intellectual property,

(d) any amounts of insurance, damages or compensation in relation to intellectual property,

where that amount is taken into account in computing, for the purposes of assessment to corporation tax, the profits of a trade;

‘turnover threshold amount’ means €50,000,000 and where an accounting period is shorter than 12 months, this amount shall be reduced proportionately.

(2) (a) This section shall apply to a relevant company and an accounting period, where the relevant company satisfies the conditions set out in paragraph (b).

(b) The conditions required by this paragraph are—

(i) the company has average overall income from intellectual property not in excess of the company threshold amount,

(ii) where that company is a member of a group, the group has turnover not in excess of the turnover threshold amount, and

(iii) the company is a micro, small or medium-sized enterprise within the meaning of the Annex to Commission Recommendation 2003/361/EC of 6 May 2003[^25] concerning the definition of micro, small and medium-sized enterprises.

(3) In relation to a relevant company and an accounting period to which this section applies, this Chapter shall apply as if the definition of ‘intellectual property’ in section 769G(1) also included intellectual property for small companies.

(4) A company claiming to be a relevant company to which this section applies shall have available such records as may reasonably be required for the purposes of determining whether it is a relevant company to which this section applies and section 769L shall apply to those documents.”,

and

(c) in paragraph (I)(A) of the definition of “expenditure on research and development” in section 766(1) (a) by substituting “is part of overall income from a qualifying asset within the meaning of section 769G” for “is income from a qualifying patent within the meaning of section 234”.

(2) Paragraph (b) of subsection (1) shall come into operation on such day or days as the Minister for Finance may by order or orders appoint.

33. Country-by-country reporting

33. The Principal Act is amended in Chapter 3 of Part 38 by inserting the following after section 891G (inserted by section 74):

“891H. (1) In this section—

‘constituent entity’, ‘fiscal year’, ‘MNE group’, ‘qualifying competent authority agreement’, ‘reporting entity’, ‘surrogate parent entity’, ‘systemic failure’ and ‘ultimate parent entity’, have the meanings given to them respectively by Article 1 of the OECD model legislation;

‘competent authority’ means a competent authority for the purposes of a qualifying competent authority agreement;

‘income tax’ means income tax or corporation tax or any foreign tax that corresponds to income tax or corporation tax in the State;

‘country-by-country report’, in relation to an MNE group, means a report that contains the information set out in subsection (4) ;

‘OECD’ means the Organisation for Economic Co-operation and Development;

‘OECD model legislation’ means the Model Legislation Related to Country-by-Country Reporting contained in Annex IV to Chapter V of the OECD Report of 2015;

‘OECD Report of 2015’ means the ‘Transfer Pricing Documentation and Country-by-Country Reporting, Action 13 - 2015 Final Report’ published by the OECD on 5 October 2015.

(2) An ultimate parent entity, which is resident in the State for tax purposes, of an MNE group, shall provide to the Revenue Commissioners not later than 12 months after the last day of its fiscal year, being a fiscal year commencing on or after 1 January 2016, a country-by-country report with respect to the MNE group which relates to that year.

(3) An ultimate parent entity, which is resident in the State for tax purposes, of an MNE group, shall notify the Revenue Commissioners, within the period specified and in such manner as is provided for in regulations to be made under this section, that the ultimate parent entity is an ultimate parent entity for the purposes of this section.

(4) A country-by-country report provided under subsection (2) shall contain the following information in respect of the MNE group concerned:

(a) with regard to each jurisdiction in which the MNE group concerned operates, aggregate information relating to the amount of its—

(i) revenue, including such further information in relation to such revenue as is necessary to complete the Model Template for the Country-by-Country Report set out in Annex III to Chapter V of the OECD Report of 2015,

(ii) profit or loss before income tax,

(iii) income tax paid,

(iv) income tax accrued,

(v) stated capital,

(vi) accumulated earnings,

(vii) number of employees, and

(viii) tangible assets other than cash or cash equivalents;

(b) information setting out—

(i) the identification of each constituent entity of the MNE group concerned,

(ii) the jurisdiction of tax residence of such constituent entity and, where different from such jurisdiction of tax residence, the jurisdiction under the laws of which such constituent entity is organised, and

(iii) the nature of the main business activity or activities of such constituent entity.

(5) The Revenue Commissioners shall make regulations under this section with respect to the manner and form in which a country-by-country report is to be provided.

(6) Regulations made under this section may, in particular—

(a) make provision for a surrogate parent entity or an entity described in paragraph (2) of Article 2 of the OECD model legislation, as the case may be, to provide a country-by-country report to the Revenue Commissioners,

(b) determine the date by which a surrogate parent entity or an entity described in paragraph (2) of Article 2 of the OECD model legislation, as the case may be, is required to provide a country-by-country report to the Revenue Commissioners,

(c) make provision to amend the information to be included in a country-by-country report required to be provided by an entity described in paragraph (2) of Article 2 of the OECD model legislation,

(d) require an ultimate parent entity, a surrogate parent entity or an entity described in paragraph (2) of Article 2 of the OECD model legislation, as the case may be, to notify the Revenue Commissioners within the period specified, and in such manner as is specified, that the ultimate parent entity, surrogate parent entity or entity described in paragraph (2) of Article 2 of the OECD model legislation, as the case may be, are such entities,

(e) require a constituent entity resident in the State for tax purposes which is not the ultimate parent entity, surrogate parent entity or entity described in paragraph (2) of Article 2 of the OECD model legislation, as the case may be, to notify the Revenue Commissioners within a period and in such manner as is to be specified, of the identity and jurisdiction of tax residence of the reporting entity,

(f) provide for the serving of a notice to a constituent entity resident in the State for tax purposes that there has been a systemic failure by the state of tax residence of the parent entity,

(g) specify and modify, as required, the manner and form in which a country-by-country report is to be provided,

(h) make provision as to how information contained in a country-by- country report is to be used,

(i) make provision for preserving the confidentiality of the information contained in a country-by-country report, and

(j) contain such supplemental and incidental matters as appear to the Revenue Commissioners to be necessary—

(i) to enable entities to fulfil their obligations under this section or regulations made under this section, and

(ii) for the operation, administration and implementation of this section or regulations made under this section.

(7) Section 898O shall apply to—

(a) a failure by a reporting entity to provide a country-by-country report to the Revenue Commissioners as required by this section or by regulations made under this section, and

(b) the provision of an incorrect or incomplete country-by-country report under this section or regulations made under this section,

as it applies to a failure to make a return or to the making of an incorrect or incomplete return referred to in section 898O.

(8) (a) A reporting entity required by this section, or by regulations made under this section, to provide a country-by-country report to the Revenue Commissioners shall, in relation to that report have available for inspection, on the request of an officer of the Revenue Commissioners, such records as may reasonably be required for the purposes of determining whether the report is correct and complete.

(b) The records referred to in paragraph (a) —

(i) shall be prepared on a timely basis and subsection (3) of section 886 shall apply to such records as it applies to records required by that section, and

(ii) shall be retained by the reporting entity concerned for a period of 6 years beginning at the end of the fiscal year to which the country-by-country report relates.

(i) to records referred to in paragraph (a) as if they were books, records or other documents within the meaning of section 900, and

(ii) to information, explanations and particulars that the authorised officer, within the meaning of those sections, may reasonably require, being information, explanations and particulars which are related to, or in connection with, a country-by-country report.

(9) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

(10) Notwithstanding section 851A, the Revenue Commissioners are authorised to communicate to the competent authority of a state, other than the State, information which is contained in a country-by-country report required under this section or in regulations made under this section, provided that there is a qualifying competent authority agreement in place which allows for the exchange of such information.

(11) Any word or expression which has a meaning given to it by Article 1 of the OECD model legislation shall, where it is used in regulations made under this section and unless the contrary intention appears, have the same meaning in those regulations as it has in that OECD model legislation.”.

34. Amendment of section 831 of Principal Act (implementation of Council Directive No. 90/435/EEC concerning the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States)

34. (1) Section 831 of the Principal Act is amended—

(a) in subsection (1)(a) by deleting the definition of “arrangements”,

(b) in subsection (1)(a), in the definition of “bilateral agreement”, by substituting “arrangements having the force of law by virtue of section 826(1)” for “arrangements”,

(c) in subsection (3)(a), by substituting “arrangements having the force of law by virtue of section 826(1) ” for “arrangements”, and

(d) by inserting the following after subsection (6) —

“(7) (a) Subsections (1) to (5) shall not apply to an arrangement or a series of arrangements which—

(i) has been put in place for the main purpose of, or one of the main purposes of which is, obtaining a tax advantage that defeats the object or purpose of the Directive, and

(ii) is not genuine having regard to all the facts and circumstances.

(b) For the purposes of paragraph (a)(ii), an arrangement or series of arrangements shall be regarded as not genuine to the extent that it is not put into place for valid commercial reasons which reflect economic reality.

(2) This section shall have effect in respect of distributions made or received on or after the date of passing of this Act.

Chapter 6 Capital Gains Tax

35. Entrepreneur relief

35. The Principal Act is amended—

(a) in section 597A, by inserting the following after subsection (5):

“(6) Subject to section 597AA(5) —

(a) subsection (2) shall not apply where the subsequent disposal referred to in that subsection is made on or after 1 January 2016, and

(b) subsection (3) shall not apply where the second-mentioned subsequent disposal in that subsection is made on or after 1 January 2016.”,

and

(b) by inserting the following after section 597A:

“Revised entrepreneur relief

597AA. (1) (a) In this section—

‘51 per cent subsidiary’ has the same meaning as it has in section 9(1)(a);

‘development land’ has the same meaning as it has in section 648;

‘group’ means a holding company and all companies which are 51 per cent subsidiaries of the holding company;

‘holding company’ means a company whose business consists wholly or mainly of the holding of shares of all companies which are its 51 per cent subsidiaries;

‘qualifying business’ means a business other than—

(a) the holding of securities or other assets as investments,

(b) the holding of development land, or

‘qualifying group’ means a group, the business of each 51 per cent subsidiary (other than a holding company) in which consists wholly or mainly of the carrying on of a qualifying business;

‘qualifying person’ means an individual who is or has been a director or employee of a company (or companies in a qualifying group) who—

(a) is or was required to spend not less than 50 per cent of that individual’s working time in the service of that company (or those companies) in a managerial or technical capacity, and

(b) has served in that capacity for a continuous period of 3 years in the period of 5 years immediately prior to the disposal of the chargeable business assets of which the disposal of shares in the company (or one of those companies) forms the whole or part;

‘relevant company’ means a company (including a company in a qualifying group) the disposal of shares in which forms the whole or part of the disposal of chargeable business assets;

‘relevant individual’ means an individual who has been the beneficial owner of the chargeable business assets for a continuous period of not less than 3 years in the 5 years immediately prior to the disposal of those assets;

‘working time’ means any time that an employee or director is—

(a) at his or her place of work or, in the case of an employee, at his or her employer’s disposal, and

(b) carrying on or performing the activities or duties of his or her work.

(b) (i) For the purposes of the definition of ‘qualifying person’ in paragraph (a), any period during which the individual was a director or employee of—

(I) a company that was treated as being the same company, for the purposes of section 586, as a relevant company, or

(II) a company involved in a scheme of reconstruction or amalgamation under section 587 with a relevant company,

shall be taken into account in calculating the periods during which the individual was a director or employee.

(ii) For the purposes of the definition of ‘relevant individual’ in paragraph (a), any period during which the individual owned shares in—

(I) a company that was treated as being the same company, for the purposes of section 586, as a relevant company, or

(II) a company involved in a scheme of reconstruction or amalgamation under section 587 with a relevant company,

shall be taken into account in calculating the periods during which the individual was a beneficial owner.

(2) (a) Subject to paragraph (b), ‘chargeable business asset’ means an asset, including goodwill which—

(i) is, or is an interest in, an asset used for the purposes of a qualifying business carried on by an individual, or

(ii) is a holding of ordinary shares in—

(I) a company whose business consists wholly or mainly of carrying on a qualifying business, or

(II) a holding company of a qualifying group,

in respect of which an individual—

(A) owns not less than 5 per cent of the ordinary share capital, and

(B) is a qualifying person in respect of the company or, if the company is a member of a qualifying group, of one or more companies which are members of the qualifying group.

(b) ‘Chargeable business asset’ does not include—

(i) shares (other than shares mentioned in paragraph (a)(ii)), securities or other assets held as investments,

(ii) development land, or

(iii) assets on the disposal of which no gains accruing would be chargeable gains.

(3) Subject to subsection (4), the rate of capital gains tax chargeable on a chargeable gain or chargeable gains accruing in respect of a disposal or disposals of the whole or part of chargeable business assets made by a relevant individual shall be 20 per cent.

(4) (a) The rate of capital gains tax referred to in subsection (3) shall be chargeable only on so much, if any, of the chargeable gain or chargeable gains accruing, when added to the aggregate amount of any chargeable gain or chargeable gains accruing in respect of any previous disposal of the whole or part of chargeable business assets made by the relevant individual in the lifetime of that individual on or after 1 January 2016, that does not exceed €1,000,000.

(b) The rate of capital gains tax referred to in section 28(3) shall be chargeable on so much, if any, of the chargeable gain or chargeable gains accruing, when added to the aggregate amount of any chargeable gain or chargeable gains accruing in respect of any previous disposal of the whole or part of chargeable business assets made by the relevant individual in the lifetime of that individual on or after 1 January 2016, that exceeds €1,000,000.

(5) This section shall not apply, and section 597A shall apply, to a disposal of the whole or part of chargeable business assets made by a relevant individual where the amount of capital gains tax payable in respect of the disposal under this section is greater than the amount of capital gains tax payable in respect of the disposal were section 597A to apply.”.

36. Amendment of section 29 of Principal Act (persons chargeable)

36. (1) Section 29 of the Principal Act is amended—

(a) in subsection (1) by—

(i) substituting “company.” for “company;” in the definition of “security”, and

(ii) deleting “references to the disposal of assets mentioned in paragraphs (a) and (b) of subsection (3) and in subsection (6) include references to the disposal of shares deriving their value or the greater part of their value directly or indirectly from those assets, other than shares quoted on a stock exchange.”,

and

(b) by inserting the following subsection after subsection (1) —

“(1A) (a) In this subsection—

‘arrangement’ includes any agreement, understanding, scheme, transaction or series of transactions;

‘relevant assets’ means assets mentioned in—

(i) subsection (3)(a) or (b), or

(ii) subsection (6).

(b) A disposal of relevant assets, for the purpose of this section, includes the disposal of shares deriving their value or the greater part of their value directly or indirectly from those assets, other than shares quoted on a stock exchange.

(c) In calculating the portion of the value of shares attributable directly or indirectly to relevant assets for the purposes of paragraph (b), account shall not be taken of any arrangement that—

(i) involves a transfer of money from a person connected with the company in which those shares are held,

(ii) is made before a disposal of relevant assets, and

(iii) the main purpose or one of the main purposes of which is the avoidance of tax.”.

(2) This section applies to disposals made on or after 22 October 2015.

37. Amendment of section 541B of Principal Act (restrictive covenants)

37. (1) Section 541B of the Principal Act is amended in subsection (1) by substituting “the person referred to in paragraph (a)” for “the person to whom it is paid”.

(2) This section applies to sums paid on or after 22 October 2015 in respect of the giving of an undertaking referred to in section 541B(1)(a) of the Principal Act.

38. Amendment of section 542 of Principal Act (time of disposal and acquisition)

38. Section 542 of the Principal Act is amended by inserting the following subsections after subsection (1):

“(1A) Notwithstanding subsection (1)(c), the time of the disposal of land which has been compulsorily acquired shall be the time at which the compensation amount in respect of that compulsory acquisition is received, where that amount is received on or after 1 January 2016.

(1B) Notwithstanding subsection (1)(d), the time of the deemed accrual of a chargeable gain in respect of a disposal of land which has been compulsorily acquired shall be the time at which the compensation amount in respect of that compulsory acquisition is received, where that amount is received on or after 1 January 2016.”.

39. Amendment of section 590 of Principal Act (attribution to participators of chargeable gains accruing to non-resident company)

39. Section 590(7) of the Principal Act is amended by inserting the following after paragraph (a):

“(aa) a chargeable gain accruing on the disposal of assets where it is shown to the satisfaction of the Revenue Commissioners that the disposal was made for bona fide commercial reasons and did not form part of an arrangement of which the main purpose or one of the main purposes was the avoidance of liability to capital gains tax or corporation tax,”.

40. Amendment of Part 20 of Principal Act (companies’ chargeable gains)

40. Chapter 1 of Part 20 of the Principal Act is amended—

(a) in section 615(2)(a), by substituting the following for subparagraph (iv):

“(iv) the company acquiring the assets is not—

(I) an authorised investment company (within the meaning of Part XIII of the Companies Act 1990) that is an investment undertaking (within the meaning of section 739B), or

(II) an authorised ICAV (within the meaning of section 2 of the Irish Collective Asset-management Vehicles Act 2015 (No. 2 of 2015)),”,

and

(b) in section 617(1)(c)(ii), by—

(i) substituting “section 739B),” for “section 739B), or” in Clause I,

(ii) substituting “section 705A), or” for “section 705A),” in Clause II, and

(iii) inserting the following after Clause II:

“(III) an authorised ICAV (within the meaning of section 2 of the Irish Collective Asset-management Vehicles Act 2015 (No. 2 of 2015)),”.

41. Amendment of section 615 of Principal Act (company reconstruction or amalgamation: transfer of assets)

41. (1) Section 615 of the Principal Act is amended by inserting the following after subsection (4):

“(4A) (a) In this subsection—

‘arrangement’ includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);

‘tax’ means income tax, corporation tax or capital gains tax.

(b) This section shall not apply to a scheme of reconstruction or amalgamation involving the transfer of the whole or part of a company’s business to another company unless it is shown that the reconstruction or amalgamation is effected for bona fide commercial reasons and does not form part of an arrangement the main purpose, or one of the main purposes, of which is the avoidance of liability to tax.”.

(2) This section applies to disposals made on or after 22 October 2015.

42. Amendment of section 980 of Principal Act (deduction from consideration on disposal of certain assets)

42. Section 980(3) of the Principal Act is amended by inserting “(or the sum of €1,000,000 if the asset disposed of is a house (within the meaning of section 372AK))” after “€500,000”.

PART 2 Excise

43. Amendment of Chapter 1 of Part 2 of Finance Act 2003 (alcohol products tax)

43. (1) Chapter 1 of Part 2 of the Finance Act 2003 is amended—

(a) in section 73 in the definition of “counterfeit goods” by substituting “Regulation (EU) No. 608/2013 of the European Parliament and of the Council of 12 June 2013[^26]” for “Council Regulation (EC) No. 1383/2003 of 22 July 2003[^27]”, and

(b) in section 78A by substituting the following for subsection (2):

“(2) Relief under subsection (1) shall be granted by the Commissioners either by means of remission or repayment.”.

(2) Subsection (1)(b) comes into operation on such day as the Minister for Finance may appoint by order.

44. Amendment of Chapter 4 of Part 2 of Finance Act 2001 (powers of officers)

44. Chapter 4 of Part 2 of the Finance Act 2001 is amended—

(a) in section 133 by inserting the following definitions:

“ ‘the Acts’ has the meaning assigned to it by section 1078(1) of the Taxes Consolidation Act 1997;

‘computer’ means any electronic device used for information storage or retrieval and includes a mobile phone or any other electronic means of information storage or retrieval;

‘computer at the premises or place which is being searched’, includes any other computer, whether at that premises or place, or at any other premises or place, which is lawfully accessible by means of the computer at the premises or place being searched;

‘information in a non-legible form’ has the meaning assigned to it by section 908C of the Taxes Consolidation Act 1997;

‘premises or place’ means any building (or part of a building), dwelling, vehicle, any other vessel or place (or part of a place), whatsoever;”,

(b) in section 135 by inserting the following subsection after subsection (1):

“(1A) Where an officer carrying out a search under subsection (1) reasonably suspects that any excisable products in the vehicle are liable to forfeiture under excise law, then that officer, or any officer accompanying that officer, may—

(a) search the vehicle for any record or thing that the officer reasonably believes is likely to be of value (whether by itself or together with other information) to the investigation of excisable products liable to forfeiture, or for any legal proceedings under excise law,

(b) inspect and take copies of, or extracts from, any such record (including, in the case of any information in a non-legible form, a copy of, or of an extract from, such information in a permanent legible form),

(c) remove, retain and operate any computer found in the vehicle, or in the possession of a person in the vehicle, for the purpose of accessing, reproducing or copying records that an officer reasonably believes to contain information likely to be of value in the investigation of excisable products liable to forfeiture or for any legal proceedings under excise law and to retain such computer for so long as it is reasonably required for this purpose, and

(d) require a person who appears to an officer to be in a position to facilitate access to the records and information held on, or which can be accessed by the use of, a computer retained under paragraph (c), to give to the officer any password or guidance necessary to operate the computer for the purpose of accessing the records and information held on, or accessible, by the computer, in a form in which the information is visible and legible.”,

and

(i) by substituting “premises or place” for “premises or other place” in subsections (1) and (2),

(ii) by substituting the following for paragraph (c) of subsection (3):

“(c) in relation to any records referred to in subsection (1)(f) —

(i) search for, inspect and take copies of or extracts from any such records (including, in the case of any information in a non- legible form, a copy of, or of an extract from, such information in a permanent legible form),

(ii) require any person present to produce any such records which are in that person’s possession, custody or procurement and in the case of information in a non-legible form, to produce it in a legible form or to reproduce it in a permanent legible form,

(iii) remove and, for as long as necessary, retain (or cause to be removed and retained) any record found there, or in the possession of a person present there at the time of the search, where an officer reasonably believes the record is likely to be of value (whether by itself or together with other information)—

(I) to the investigation of an offence under excise law, or for the purpose of any legal proceedings under excise law, or

(II) as evidence of, or relating to, the commission of an offence under excise law, or

(III) in the assessment of any duty payable under excise law or any other tax payable under the Acts,

and

(iv) take any other steps which may appear to the officer to be necessary for preserving any such record and preventing interference with it,”,

(iii) by substituting the following for subsection (6):

“(6) A search warrant issued under this section shall be expressed and shall operate to authorise a named officer accompanied by such other officers and such other persons as the officer considers necessary—

(a) to enter, at any time or times within one month of the date of issuing of the warrant, (if necessary by the use of reasonable force) the premises or place named or specified in the warrant,

(b) to search, or cause to be searched, such premises or place and to inspect any thing or record found there,

(c) to require any person present to produce for inspection any record or thing in that person’s possession, custody, or procurement,

(d) to seize any thing found there, or in the possession of a person there, if there are reasonable grounds for suspecting that the thing is liable to forfeiture under the law relating to excise, or exercise, in relation to any thing so found or in the possession of such a person, the power of detention under section 140,

(e) to remove, or cause to be removed, from there any thing or record that the officer has reason to believe may be of value to the investigation of an excise offence, or as evidence in proceedings under excise law, or for the purpose of assessing any duty payable under excise law or any other tax payable under the Acts, and to retain such thing or record for so long as it is reasonably required for these purposes,

(f) to take any other steps which may appear to the officer to be necessary for preserving any such thing or record and preventing interference with it.”,

and

(iv) by the addition of the following subsections after subsection (6):

“(7) The authority conferred by a search warrant issued under this section to retain (or to cause to be retained) any record or thing includes—

(a) in the case of books, documents or records, authority to make and retain a copy of the books, documents or records, and

(b) authority to remove and, for as long as necessary, retain, any computer or other storage medium in which records are kept and to inspect, copy, or cause to be copied, such records.

(8) An officer acting pursuant to a search warrant under this section may—

(a) operate any computer at the premises or place being searched, or cause any such computer to be operated by a person accompanying the officer,

(b) operate any computer removed from a premises or place searched under this section or cause any such computer to be operated by a person accompanying the officer, and

(c) require any person at that premises or place who appears to the officer to be in a position to facilitate access to the records and information held in a computer, or to records and information that can be accessed by the use of that computer—

(i) to give to the officer any password or guidance necessary to operate it,

(ii) to enable the officer to examine the information accessible by the computer in a form in which the information is visible and legible, or

(iii) to produce the information in a form in which it can be removed and in which it is, or can be made, visible and legible.

(9) Any record or thing retained by an officer under this section which is required for the purposes of any legal proceedings, whether criminal proceedings or otherwise, may be retained for so long as it is reasonably required for those purposes.”.

45. Rates of tobacco products tax

45. The Finance Act 2005 is amended with effect as on and from 14 October 2015 by substituting the following for Schedule 2 (as amended by section 60 of the Finance Act 2014 (No. 37 of 2014)) to that Act:

“SCHEDULE 2

Rates of Tobacco Products Tax

(With effect as on and from 14 October 2015)

”.

46. Amendment of section 99 of Finance Act 2001 (liability of persons)

46. (1) Section 99 of the Finance Act 2001 is amended by inserting the following after subsection (12):

“(13) Where a person is required to furnish a return or make a claim, submission or declaration for the purposes of any requirement of excise law, this return, claim, submission or declaration, as the case may be, shall be made by such electronic means as the Commissioners may require and, without prejudice to the generality of section 917E of the Taxes Consolidation Act 1997, the relevant provisions of Chapter 6 of Part 38 of that Act shall apply to any such return, claim, submission or declaration.”.

(2) This section shall come into operation on such day as the Minister for Finance may appoint by order.

47. Amendment of section 109 of Finance Act 2001 (authorisation of warehousekeepers and approval of tax warehouses)

47. Section 109 of the Finance Act 2001 is amended—

(a) by inserting the following after subsection (2):

“(2A) The granting to, or the holding by, an applicant or holder, as the case may be, of an authorisation shall be conditional on the applicant or authorised warehousekeeper complying with excise law in relation to excisable products, including the requirements of this Chapter relating to the systems (including the accounting and stock control systems) and procedures of the business to which the authorisation relates.”,

(b) by substituting the following for subsection (3):

“(3) (a) The Commissioners shall grant an authorisation under this section only where it is shown to their satisfaction that the applicant, or where the applicant is a company, any director or person having control (within the meaning of section 11 of the Taxes Consolidation Act 1997) of that company, can satisfy the conditions of authorisation.

(b) The Commissioners shall grant an authorisation only where it is shown to their satisfaction that the business activity to be carried out in the tax warehouse under the authorisation is to be undertaken with a view to the realisation of profits from legitimate trade in excisable products.

(c) The Commissioners shall not grant an authorisation where an applicant or, where the applicant is a company, any director or person having control (within the meaning of section 11 of the Taxes Consolidation Act 1997) of that company has, in the 10 years prior to such application for the authorisation, been convicted of—

(i) any indictable offence under the Acts referred to in section 1078(1) of the Taxes Consolidation Act 1997, or

(ii) any corresponding offence under the law of another Member State.

(d) The Commissioners shall not grant an authorisation where an applicant or, where the applicant is a company, any director or person having control (within the meaning of section 11 of the Taxes Consolidation Act 1997) of that company, does not hold a current tax clearance certificate issued under section 1094 of the Taxes Consolidation Act 1997.

(e) The Commissioners shall not grant an authorisation to an applicant for the production or processing of excisable products where such applicant does not hold a current licence for such production or processing where such licence is required under excise law.

(f) The Commissioners shall grant an authorisation to an applicant only where it is shown to their satisfaction that the systems (including the accounting and stock control systems) and procedures of the business to which the application for the authorisation relates will provide a full and true record of all transactions of that business in a form readily accessible to the Commissioners.

(g) The Commissioners shall grant an authorisation to an applicant only where it is shown to their satisfaction that the activity to be carried out under the authorisation will be conducted solely for the benefit of the applicant.

(h) The Commissioners shall not grant an authorisation where the applicant or, where the applicant is a company, any director or person having control (within the meaning of section 11 of the Taxes Consolidation Act 1997) of that company, has been authorised previously and there has been a contravention of, or a failure to comply with, the conditions of that authorisation and the applicant has not shown to the satisfaction of the Commissioners that the contravention or failure has been remedied.

(i) The Commissioners shall grant an authorisation only where it is shown to their satisfaction that the premises or place relating to the approval of a tax warehouse under subsection (5) is suitable for the security of the excisable products to be produced, held or processed in, or to be dispatched from or received into, such premises or place.”,

“(11A) Where an authorised warehousekeeper ceases to carry out the activities for which the authorisation was granted—

(a) the authorisation shall cease to have effect, and

(b) the authorised warehousekeeper shall notify the Commissioners, in writing, of the cessation of the activity for which the authorisation was granted before the date on which the authorised warehousekeeper ceases to act as such.”,

and

(d) by substituting the following for subsection (12):

“(12) An authorisation under this section is at all times subject to the conditions of authorisation, and the Commissioners may revoke an authorisation where—

(a) the authorised warehousekeeper or, where the authorised warehousekeeper is a company, any director or person having control (within the meaning of section 11 of the Taxes Consolidation Act 1997) of that company has in the preceding 10 years been convicted of—

(i) any indictable offence under the Acts referred to in section 1078(1) of the Taxes Consolidation Act 1997, or

(ii) any corresponding offence under the law of another Member State,

(b) the Commissioners are satisfied that there has been a contravention of, or failure to comply with, a requirement of excise law in relation to the excisable products for which the authorisation was granted—

(i) by the authorised warehousekeeper or, where the holder of the authorisation is a company, any director or person having control (within the meaning of section 11 of the Taxes Consolidation Act 1997) of that company, or

(ii) at the premises or place approved as a tax warehouse,

and the authorised warehousekeeper has not shown to the satisfaction of the Commissioners that the contravention or failure has been remedied,

(c) the Commissioners are satisfied that there has been a contravention of, or failure to comply with, any of the conditions of authorisation by the authorised warehousekeeper and the authorised warehousekeeper has not shown to the satisfaction of the Commissioners that the contravention or failure has been remedied,

(d) the authorised warehousekeeper, when applying for that authorisation, or for approval of a tax warehouse, provided information that was false or misleading in a material respect,

(e) the authorised warehousekeeper does not, when required to do so by the Commissioners, show to the satisfaction of the Commissioners that the activity carried out under the authorisation is undertaken with a view to the realisation of profits from legitimate trade in excisable products,

(f) the authorised warehousekeeper does not, when required to do so by the Commissioners, show to the satisfaction of the Commissioners that the activity carried out under the authorisation is conducted solely for the benefit of the authorised warehousekeeper,

(g) the authorised warehousekeeper does not, when required to do so by the Commissioners, show to the satisfaction of the Commissioners that the systems (including the accounting and stock control systems) and procedures of the business to which the authorisation relates provide a full and true record of all transactions of that business in a form readily accessible to the Commissioners, or

(h) the authorised warehousekeeper does not, when required to do so by the Commissioners, show to their satisfaction that the premises or place approved as a tax warehouse is suitable for the security of the excisable products produced, held or processed in, or to be dispatched from or received into, such premises or place.”.

48. Amendment of section 130 of Finance Act 1992 (interpretation)

48. Section 130 of the Finance Act 1992 is amended by substituting the following for the definition of “motor caravan”:

“‘motor caravan’ means a vehicle within the meaning of paragraph 5.1 of Annex II to Directive 2007/46/EC that has the dimensions prescribed in regulations (if any) made by the Commissioners under section 141(2)(t);”.

49. Amendment of section 135D of Finance Act 1992 (repayment of amounts of vehicle registration tax on export of certain vehicles)

49. (1) Section 135D of the Finance Act 1992 is amended—

(a) in subsection (1)(d)(ii) by substituting “within the meaning of the Road Traffic (National Car Test) Regulations 2014 (S.I. No. 322 of 2014)” for “within the meaning of the Road Traffic (National Car Test) Regulations 2003 (S.I. No. 405 of 2003)”, and

(b) in subsection (4)(b) by substituting “€100” for “€500”.

(2) Subsection (1)(b) comes into operation on 1 January 2016.

50. Amendment of section 141 of Finance Act 1992 (regulations)

50.Section 141 of the Finance Act 1992 is amended in subsection (2)(t), by inserting “the required vehicle dimensions and” after “prescribe”.

PART 3 Value-Added Tax

51. **Interpretation (Part 3)**

51. In this Part “Principal Act” means the Value-Added Tax Consolidation Act 2010.

52. Supplies of gas, electricity, gas certificates and electricity certificates - reverse charge

52. (1) The Principal Act is amended—

(a) in section 16 by inserting the following after subsection (5):

“(6) (a) In this subsection—

‘gas’ means gas supplied through the natural gas distribution system.

(b) Where a taxable person who carries on a business in the State makes a supply of gas or of electricity to a taxable dealer who carries on a business in the State (in this subsection referred to as a ‘recipient’), then—

(i) the recipient shall, in relation to that supply, be an accountable person or be deemed to be an accountable person and shall be liable to pay the tax chargeable as if that recipient made that supply in the course or furtherance of business, and

(ii) the person who supplied that gas or electricity shall not be accountable for or liable to pay such tax in respect of that supply.

(7) (a) In this subsection—

‘a gas or an electricity certificate’ means an electronic document which conveys information about the source and production of energy.

(b) Where a taxable person who carries on a business in the State makes a supply of a gas or an electricity certificate to another taxable person who carries on a business in the State (in this subsection referred to as a ‘recipient’), then—

(ii) the person who supplied that gas or electricity certificate shall not be accountable for or liable to pay such tax in respect of that supply.”,

(b) in section 59 by inserting the following after subsection (2)(ib):

“(ic) the tax chargeable during the period, being tax for which the recipient (within the meaning of section 16(6)(b)) is liable by virtue of section 16(6) (b) in respect of supplies of gas or of electricity received by that recipient, but only where that recipient would be entitled to a deduction of that tax elsewhere under this subsection if that tax had been charged to such a recipient by an accountable person,

(id) the tax chargeable during the period, being tax for which the recipient (within the meaning of section 16(7)(b)) is liable by virtue of section 16(7)(b) in respect of a gas or an electricity certificate received by that recipient, but only where that recipient would be entitled to a deduction of that tax elsewhere under this subsection if that tax had been charged to such a recipient by an accountable person,”,

and

“(4C) (a) Where a taxable person who carries on a business in the State makes a supply of gas or electricity (to which section 16(6) applies) to a recipient (within the meaning of section 16(6)(b)), the person shall issue a document to the recipient indicating—

(i) that the recipient is liable to account for the tax chargeable on that supply, and

(ii) such other particulars as would be required to be included in that document if that document were an invoice required to be issued in accordance with subsection (1) but excluding the rate at which tax is chargeable and the amount of tax payable.

(b) Where the recipient and the person who supplied the gas or electricity so agree, section 71(1) may apply to this document as if it were an invoice.

(4D) (a) Where a taxable person who carries on a business in the State makes a supply of a gas or an electricity certificate (within the meaning of section 16(7)(a)), to a recipient (within the meaning of section 16(7)(b)), the person shall issue a document to the recipient indicating—

(i) that the recipient is liable to account for the tax chargeable on that supply, and

(b) Where the recipient and the person who supplied the gas or electricity certificate so agree, section 71(1) may apply to this document as if it were an invoice.”.

(2) Subsection (1) shall come into operation on 1 January 2016.

53. Adjustments to returns

53. The Principal Act is amended—

(a) in section 76(4)(a)(i), by inserting “, or an adjustment to a return as referred to in section 77A,” after “or section 77”, and

(b) by inserting the following after section 77:

“Adjustments to returns

77A. (1) Where, following the submission to the Collector-General of a return (in this section referred to as an ‘original return’) required to be furnished under section 76 or 77, as appropriate, that return is adjusted by an accountable person by means of—

(a) a correction to the original return,

(b) a replacement of the original return, or

(in this section and in section 76(4) referred to as an ‘adjustment to a return’) the provisions of any enactment relating to value-added tax shall apply to that adjustment to a return as if it were a return required to be furnished under section 76 or 77, as appropriate.

(2) Any adjustment to a return to which subsection (1) applies shall, where applicable, be deemed to be a claim for a refund of tax and be subject to the provisions of section 99.”.

54. Exempted education activities

54. The Principal Act is amended—

(a) in section 18—

(i) in subsection (1)(a), by substituting “section 52 and, paragraph 3(4) or 4(3) of Schedule 1” for “section 52 and paragraph 3(4) of Schedule 1”, and

(ii) in subsection (1)(a)(III) by substituting “paragraph (a), (c) or (ca) ” for “paragraph (c) or (ca) ”,

(b) in Schedule 1—

(i) by substituting the following subparagraph for subparagraph (3) of paragraph 4:

“(3) (a) The provision by a recognised body of children’s or young people’s education, school or university education, or vocational training or retraining (including the supply of goods and services incidental to that provision, other than the supply of research services), but excluding instruction in the driving of mechanically propelled road vehicles other than—

(i) vehicles designed or constructed for the carriage of 1.5 tonnes of goods or more, or

(ii) vehicles designed or constructed for the carriage of more than 9 persons (including the driver).

(b) In this subparagraph—

‘recognised body’ means—

(i) a public body,

(ii) any of the following bodies:

(I) a recognised school within the meaning of the Education Act 1998;

(II) an education or training provider within the meaning of the Education and Training Boards Act 2013, to which section 22 of that Act applies;

(III) a body in receipt of moneys advanced under section 21 of the Further Education and Training Act 2013;

(IV) a body providing training for initial or continued access to a regulated profession, within the meaning of the Recognition of Professional Qualifications (Directive 2005/36/EC) Regulations 2008 (S.I. No. 139 of 2008);

(V) a body providing a course leading to an award which is recognised within the National Framework of Qualifications;

(VI) a body, included for the time being on a list published by the Minister for Justice and Equality from time to time, which provides a course, attendance at which, that Minister considers provides an acceptable basis for the granting of an immigration permission;

(VII) a body providing a course leading to an award by an approved college, within the meaning assigned by section 473A of the Taxes Consolidation Act 1997;

(VIII) a provider of a programme of education and training, within the meaning of the Qualifications and Quality Assurance (Education and Training) Act 2012 which is, for the time being, validated under section 45 of that Act;

(IX) a body, providing education to children or young people which, if provided by a recognised school within the meaning of section 10 of the Education Act 1998, would be the curriculum prescribed under section 30 of that Act.”,

and

(ii) by inserting the following subparagraph after subparagraph (3) —

“(4) tuition given privately by teachers and covering school or university education.”.

55. Amendment of section 64 of Principal Act (capital goods scheme)

55. Section 64 of the Principal Act is amended by inserting the following after subsection (8):

“(8A) (a) Paragraph (b) applies where—

(i) either—

(I) a capital goods owner supplies a capital good which has not been completed and tax is chargeable on that supply, or

(II) a capital goods owner transfers (other than a transfer to which subsection (10)(c) applies) a capital good which has not been completed and tax would have been chargeable on that transfer but for the application of section 20(2)(c),

(ii) at the time of that supply or transfer, that owner and the person to whom the capital good is supplied or transferred are connected within the meaning of section 97, and

(iii) the amount of tax—

(I) chargeable on the supply of that capital good,

(II) that would have been chargeable on the transfer of that capital good but for the application of section 20(2)(c), or

(III) that would have been chargeable on the supply but for the application of section 56,

is less than the total tax incurred in relation to that capital good by the capital goods owner making that supply or transfer.

(b) The capital goods owner shall calculate an amount, which shall be payable by that owner as if it were tax due in accordance with Chapter 3 of Part 9 for the taxable period in which the supply or transfer occurs, in accordance with the formula—

K — L

where—

K is the total tax incurred in relation to that capital good by the capital goods owner making that supply or transfer, and

L is the amount of tax chargeable on the supply of that capital good, or the amount of tax that would have been chargeable on the transfer of that capital good but for the application of section 20(2)(c), or the amount of tax that would have been chargeable on the supply but for the application of section 56.”.

56. Amendment of section 65 of Principal Act (registration)

56. Section 65 of the Principal Act is amended by inserting the following after subsection (2):

“(2A) The Revenue Commissioners may cancel the registration number which has been assigned to a person in accordance with subsection (2), where that person does not become or ceases to be an accountable person.”.

57. Amendment of section 87 of Principal Act (margin scheme - taxable dealers)

57. The Principal Act is amended in section 87—

(a) in subsection (1) by substituting the following definition for the definition of “means of transport”—

“ ‘means of transport’ means—

(a) motorised land vehicles with an engine cylinder capacity exceeding 48 cubic centimetres or a power exceeding 7.2 kilowatts, other than agricultural machinery, and

(b) vessels exceeding 7.5 metres in length and aircraft with a take-off weight exceeding 1,550 kilogrammes, other than vessels and aircraft of the kind referred to in paragraph 4(2) of Schedule 2,

which are intended for the transport of persons or goods, other than new means of transport supplied where section 24(1)(b) applies in relation to that supply;”,

and

(b) by inserting the following subsection after subsection (2) —

“(2A) A taxable dealer shall not apply the margin scheme to a supply of a new means of transport where section 24(1)(b) applies in relation to that supply.”.

58. Cancellation of a registration number - special provisions for notification and publication

58. The Principal Act is amended by inserting the following after section 108C:

“Cancellation of a registration number - special provisions for notification and publication

108D. Where—

(a) a registration number assigned to a person in accordance with section 65(2) is cancelled, and

(b) it appears requisite to the Revenue Commissioners to do so for the protection of the revenue,

the Commissioners may, notwithstanding any obligation as to secrecy or other restriction upon disclosure of information imposed on them by any enactment or otherwise—

(i) inform the suppliers to the person to whom that registration number relates, insofar as it is practicable, that that person’s registration number has been cancelled and furnish them with—

(I) that cancelled registration number,

(II) the date from which that registration number has been cancelled, and

(III) the name and address of the person to whom that registration number had been assigned,

(ii) publish in Iris Oifigiúil—

(I) the cancelled registration number,

(II) the date from which that registration number has been cancelled, and

(III) the name and address of the person to whom that registration number had been assigned,

and

(iii) make publicly available the information which has been published in accordance with paragraph (ii) in any other publication and in any manner, form, format or media.”.

59. Amendment of section 110 of Principal Act (estimation of tax due)

59. Section 110 of the Principal Act is amended in subsection (2) by substituting the following for paragraph (c) —

“(c) if, after the service of the notice, the person—

(i) furnishes a return, in accordance with regulations, in respect of the period specified in the notice, and

(ii) pays tax in accordance with the return, together with any interest and costs which may have been incurred in connection with the default,

the notice shall stand discharged and the person may claim, in accordance with regulations, a refund of any excess tax which may have been paid in respect of the period specified in the notice.”.

60. Amendment of Schedule 1 to Principal Act (exempt activities)

60. Schedule 1 to the Principal Act is amended in paragraph 10 by inserting the following subparagraphs after subparagraph (1A):

“(1B) The acceptance of bets by a remote bookmaker (within the meaning of section 64 of the Finance Act 2002) from persons outside the State.

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Finance Act 2015

28. Amendment of section 1035A of Principal Act (relieving provision to section 1035)

29. Amendment of Part 36 of Principal Act (miscellaneous special provisions)

Chapter 5 Corporation Tax

30. Amendment of section 486C of Principal Act (relief from tax for certain start-up companies)

31. Amendment of section 765 of Principal Act (allowances for capital expenditure on scientific research)

32. Amendment of Part 29 of Principal Act (patents, scientific and certain other research, know-how and certain training)

33. Country-by-country reporting

34. Amendment of section 831 of Principal Act (implementation of Council Directive No. 90/435/EEC concerning the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States)

Chapter 6 Capital Gains Tax

35. Entrepreneur relief

36. Amendment of section 29 of Principal Act (persons chargeable)

37. Amendment of section 541B of Principal Act (restrictive covenants)

38. Amendment of section 542 of Principal Act (time of disposal and acquisition)

39. Amendment of section 590 of Principal Act (attribution to participators of chargeable gains accruing to non-resident company)

40. Amendment of Part 20 of Principal Act (companies’ chargeable gains)

41. Amendment of section 615 of Principal Act (company reconstruction or amalgamation: transfer of assets)

42. Amendment of section 980 of Principal Act (deduction from consideration on disposal of certain assets)

PART 2 Excise

43. Amendment of Chapter 1 of Part 2 of Finance Act 2003 (alcohol products tax)

44. Amendment of Chapter 4 of Part 2 of Finance Act 2001 (powers of officers)

45. Rates of tobacco products tax

46. Amendment of section 99 of Finance Act 2001 (liability of persons)

47. Amendment of section 109 of Finance Act 2001 (authorisation of warehousekeepers and approval of tax warehouses)

48. Amendment of section 130 of Finance Act 1992 (interpretation)

49. Amendment of section 135D of Finance Act 1992 (repayment of amounts of vehicle registration tax on export of certain vehicles)

50. Amendment of section 141 of Finance Act 1992 (regulations)

PART 3 Value-Added Tax

51. Interpretation (Part 3)

52. Supplies of gas, electricity, gas certificates and electricity certificates - reverse charge

53. Adjustments to returns

54. Exempted education activities

55. Amendment of section 64 of Principal Act (capital goods scheme)

56. Amendment of section 65 of Principal Act (registration)

57. Amendment of section 87 of Principal Act (margin scheme - taxable dealers)

58. Cancellation of a registration number - special provisions for notification and publication

59. Amendment of section 110 of Principal Act (estimation of tax due)

60. Amendment of Schedule 1 to Principal Act (exempt activities)

51. **Interpretation (Part 3)**